Valve is preparing to enter the console market with its "Steam Box" gaming hardware, but Microsoft doesn't consider it as a competitor just yet. Speaking at Microsoft's TechForum this week, Don Mattrick, president of the Interactive Entertainment Business, fielded questions about the strategy for Xbox and its competition. Asked about viewing Valve as a competitor, Mattrick simply said "no" before noting Valve is "doing some innovative stuff" and creating some great experiences. "The scale of products and things that are being brought to market are probably a little bit richer when I look at Sony, Nintendo, Apple, and Google," noted Mattrick.

Despite not viewing Valve as a competitor in the console space, Mattrick has huge respect for its founder Gabe Newell. "I love Gabe, I was there for his lifetime achievement award so it's wonderful to see what they're creating." We spoke to Gabe Newell at CES, and he's clearly bullish on Valve's chances of disrupting console gaming. "The internet is super smart. If you do something that is cool, that's actually worth people's time, then they'll adopt it," he said at the time. Since then, Newell has admitted that Apple is the Steam Box's biggest threat, at a time when the industry is anticipating Microsoft's next Xbox move.